Coffee Shops in China

Who would have thought? There are coffee shops in China. The land of Chairman Mao, the little red book, the Great Cultural Revolution, is home to a growing number of Starbucks, Costa Coffee, Paris Baguette, Tous Les Jours, and Pacific Coffee establishments selling coffee. For anyone who has not been tuned in, China is a land of tea drinkers. However, the impressive economic success of China has put money into the hands of a growing middle class which has a taste for foreign products and flavors. Starbucks already has over five hundred shops in China and plans to triple this number in the next three years. As we wrote in Starbucks Organic Coffee in China, the company opened its first outlet in China in 1999 and now has coffee shops in China in 42 cities.

Coffee Shops in China and Throughout the Orient

Starbucks and other are not limiting their coffee shop expansion to China. Korea, Indonesia, Malaysia, Singapore, Thailand, Vietnam and India are on the list. Of course the second biggest wholesale coffee producer in the world is Vietnam, second only to Brazil. Starbucks and others do not note how much of their coffee sold in the orient will be healthy organic coffee but Starbucks sells about a seventh of its coffee as certified organic coffee. The competition selling coffee in a tea drinking culture comes from around the world. Costa Coffee is British. The owners of Paris Baguette and Tous Les Jours are South Korean, and Pacific Coffee is from Hong Kong. In addition, MacDonald’s sells coffee in their restaurants as do Dunkin’ Donuts and Coffee Bean & Tea Leaf, all of which plan to expand their operations in this fast growing market.

Aiming to Change a Culture

The advent of coffee shops in China is part of another “cultural revolution” in China. However, this one is not dictated from on high and is not accompanied by bands of Mao suited individuals rounding up the educated elite and packing them off to farms in the hinter lands. China’s managed capitalism is succeeding in putting money in the pockets of entrepreneurs in China. This emerging middle class likes Western brand names and will pay more for products and services that imply their nation’s “arrival” as a major player on the world stage. A middle class with expendable income may be an excellent target for selling USDA organic coffee. As China comes to integrate its economy, and its culture, with the rest of the world we can expect to see more coffee shops in China. As this phenomenon spreads we can expect to see Chinese companies enter the battle for consumer attention and sales. However, at the current time, a large part of the attraction of Chinese coffee shops is that they are new. They sell great coffee. And, these outlets provide a level of service and visibility that the newly rich or well to do of China find attractive. The next wave may well be a preference for organic coffee as the culture becomes more environmentally aware.

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